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CHARLOTTE, N.C. — The credit crisis all but wiped out fourth-quarter earnings at Bank of America Corp. and Wachovia Corp., but the banks did make some money — something that can’t be said for Citigroup and some other Wall Street financial firms.

Profits fell 95 percent at Bank of America and 98 percent at Wachovia. The numbers, worse than analysts expected, show that the global credit squeeze is still causing more customers to fall behind on their bills and banks to lose money on securities they own.

“The continued turmoil in the capital markets and the dramatic change in the credit environment diminished our fourth-quarter results substantially,” Wachovia Chief Executive Ken Thompson said on a call with analysts.

Last week, the Charlotte-based banks saw their Wall Street brethren disclose billions in losses tied to investments in failed mortgages.

Merrill Lynch & Co., the world’s largest brokerage, lost nearly $10 billion in the last three months of 2007, its biggest quarterly loss since it was founded 94 years ago, after writing down $14.6 billion of investments. Citigroup, the No. 1 U.S. bank by assets, reported a $9.83 billion loss after writing down $18.1 billion due to its huge losing bets on mortgage-backed bond products called collateralized debt obligations.

The Federal Reserve stepped in — again — Tuesday, cutting its main interest rate by three-quarters of a percentage point to 3.5 percent in hopes of restoring stability to the faltering U.S. economy.

On a conference call with analysts, Bank of America’s Chief Executive Ken Lewis said conditions are “the toughest” he’s seen since becoming head of the biggest U.S. consumer bank in April 2001.

The bank recorded net income of $268 million, or 5 cents per share, in the three months ended Dec. 31, down from $5.26 billion, or $1.16 per share, a year ago. Revenue fell 31 percent to $12.67 billion.

Despite those numbers — and a $4.1 billion bet in purchasing beleaguered mortgage lender Countrywide Financial Corp. — Lewis said he expects Bank of America to generate earnings this year of “well above” $4 per share, absent a market disruption of the scale seen in 2007. Analysts on average expect a profit of $4.39 per share for 2008, according to Thomson Financial.

“Our economic expectations project minimum GDP growth and a slowdown, not a recession, as we expect a pretty rocky start to the year improving thereafter,” Lewis said.

Crosstown rival Wachovia said Tuesday that its fourth-quarter profit fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, in the same period a year ago.

The nation’s fourth-largest bank took a $1.7 billion write-down during the quarter due to weakening credit markets. Banks have been forced to reduce the value of bonds and debt backed by mortgages and other consumer loans that have increasingly been defaulted on in recent months.

Because of rising delinquencies and defaults, Wachovia also set aside $1 billion to cover future losses.

“These actions were necessary based on what we believe is a very realistic view of the market challenges that we face in 2008,” Thompson said.

Wachovia shares rose 93 cents, or more than 3 percent, to $31.73 in afternoon trading.

The news from the two banks was the latest in a series of declines in profit or losses at the largest U.S. financial institutions as the nation’s housing crisis and a slowing economy have forced many consumers to fall behind on their bills.

“Looking forward, the banks which have reported fourth-quarter earnings signaled that credit quality will continue to deteriorate into 2008,” wrote CreditSights senior analyst David Hendler in a research note. “Credit cards are showing signs of weakness, and commercial real estate remains a worry.”

Bank of America’s results included $5.44 billion of trading losses, compared with profits of $460 million a year earlier. This reflected a $5.28 billion write-down related to collateralized debt obligations, which the bank said reduced trading profit by $4.5 billion and other income by about $750 million.

CDOs are complex investments that combine slices of different kind of risk and are often backed in part by subprime mortgages — loans given to customers with poor credit histories — as well as other loans. In November, Bank of America executives estimated pretax CDO write-downs of at least $3 billion.

During the quarter, the company’s provision for credit losses doubled to $3.31 billion from $1.57 billion a year ago. In the bank’s consumer unit, which includes the nation’s biggest credit card business and retail branch network, revenue rose 7 percent, while earnings dropped 28 due to higher credit costs.

“We certainly are not pleased with our performance,” Lewis said. “We are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half.”